20190731final_order_no_34386.pdf

Office of the Secretary
Service Date
July 31,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION FOR AN )CASE NO.AVU-U-19-02
ORDER AUTHORIZING THE OFFERING,)ISSUANCE,AND SALE OF DEBT )ORDER NO.34386
SECURITIES NOT TO EXCEED $600,000,000.)
On July 1,2019,Avista Corporation ("Avista"or "the Company")applied to the
Commission under Idaho Code §§61-901,et seq.for authority to offer,issue,and sell debt
securities up to $600 million.This is in addition to previous authorizations this Commission has
approved,of which $195 million remain.See Order No.33978.
After the Company filed its Application,Commission Staff recommended that the
Commission approve the requested authority on certain conditions.Based on our review of the
record,we issue this Order approving the Application as noted below.
THE APPLICATION
Avista is a Washington corporation that is qualified to do business in the State of Idaho.
The Company generates,transmits,distributes,and sells electricity in northern Idaho and eastern
Washington.It also distributes and sells natural gas in eastern Washington,northern Idaho,and
central and southwest Oregon.With this Application,the Company asks for authorityto offer,
issue,and sell up to $600,000,000 of secured or unsecured,fixed or variable rate,debt securities
("Debt").The Debt maturitywill be established with each issuance and will not be less than nine
months nor more than 50 years.The interest rate for the Debt will be either fixed or floating,and
will be decided at the time of issuance.If the Company issues Debt with a floatingrate,the interest
rate will be reset periodically based on an index (generally LIBOR),commercial paper,or U.S.
Treasury bills.If the Company issues Debt with a fixed rate,the rate shall be based upon the
maturityperiod of that Debt.
If the Company issues secured debt,it will do so by issuing First Mortgage Bonds
("FMBs"):a traditional debt-financing vehicle utilized by utilities that can be offered in both
public offerings and private placement.FMBs constitute a lien under the Mortgage and Deed of
Trust,dated as of June 1,1939,as amended and supplemented by various supplemental indentures
since the inception of the Mortgage and Deed of Trust.This lien acts as collateral for the
ORDER NO.34386 1
bondholder.If the Company issues unsecured debt,the loan would not be collateralized by any
lien or any specific asset of the Company.
Net proceeds from the sale of the Debt will be used to improve and maintain the
Company's service;discharge or lawfullyrefund the Company's obligations;reimburse money
actually expended for these purposes from income or from other money in the treasury not secured
by or obtained from the issuance,assumption,or guarantee of securities;or any other purpose the
Commission approves or that is authorizedby law.
Consistent with standard reporting requirements established by our prior orders,Avista
will file the terms of the proposed Debt issuance(s)and subsequent changes to the terms with
Commission Staff.This informational filing will be made seven days (or as soon as possible)
before issuance.Avista will also file with the Commission the "Report of Securities Issued"and
verified copies of any agreement entered into pursuant to this Order for these issuances as soon as
they become available,and update the Commission if any changes occur.Avista is rated Baa2 by
Moody's and BBB by S&P Global.
The Company indicated that no person has received or would be entitled to receive any
fee:(1)for services connected with the Debt issuance and sale,other than fees for underwriting,
private placement,legal,accounting or similar professional or technical services;or (2)for services
in securing underwriters,sellers,or purchasers of the Debt.
STAFF REVIEW AND RECOMMENDATION
Staff recommended the Commission approve the authorityto issue up to $600,000,000
of Debt.Staff also recommended that the authority under this initial approval be continuing
(withoutfurther order required),provided Avista complies with both of the followingconditions:
a)Avista must maintain senior secured debt ratings that are investment grade,and b)the all-in-
coupon rate (includingfees)must not exceed 8.0%for securities issued pursuant to this authority.
Finally,Staff recommended the Commission order the Company to file the terms of
the proposed issuances of securities,and any subsequent change to the terms,with the Commission
within seven days (or as soon as possible)before the issuance occurs.Staff recommended that the
Commission order the Company to file a)the "Report of Securities Issued"required by 18 C.F.R.
§34.10,and b)verified copies of any agreement entered into in connection with the Company's
sales and issuances of securities under this Order.
ORDER NO.34386 2
FINDINGS AND DISCUSSION
Avista is a Washington corporation that is qualified to do business in Idaho.The
Company is a public utility engaged in the generation,purchase,transmission,distribution and
sale of electric energy and the purchase,distribution,and sale of natural gas.The Company is a
gas corporation within the definition of Idaho Code §61-117,an electric corporation within the
definition of Idaho Code §61-119,and a public utility within the definition of Idaho Code §61-
129.The Commission has jurisdiction over this Application under Idaho Code §61-901,et seq.
We find that the proposed transaction is in the public interest and a formal hearing on
this matter is not required.We further find that the proposed issuance is for a lawful purpose and
is within the Company's corporate powers,that the Application reasonably conforms to Rules 141
through 150 of the Commission's Rules of Procedure,IDAPA 31.01.01.141-150,and that the
Company has paid all fees due under Idaho Code §61-905.Accordingly,we find that the
Application should be approved and the proposed financing should be allowed.
The Commission's Order approving the proposed financing and the general purposes
to which the proceeds may be put is not a determination that the Commission approves of the
particular use to which these funds will be put.The Order also is not a Commission determination
or approval of the type of financing or the related costs for ratemaking purposes.The Commission
does not have before it for determination,and so does not determine,the effect of the proposed
transaction on rates the Company will charge for electric or natural gas service.
ORDER
IT IS HEREBY ORDERED that the Company's Application to issue and sell up to
$600,000,000 of secured or unsecured notes-with proposed maturity dates not less than nine
months nor more than fifty years-is granted.
IT IS FURTHER ORDERED that Avista shall file the followingas they become
available:
1.The "Report of Securities Issued"required by 18 C.F.R.§34.10;and
2.Verified copies of any agreement entered into in connection with the
Company's sales and issuances of common stock under this Order.
IT IS FURTHER ORDERED that Avista shall file the terms of the proposed issuances
of securities,and any subsequent change to the terms,with the Commission within seven days,or
as soon as possible,before the issuance occurs.
ORDER NO.34386 3
IT IS FURTHER ORDERED that this initial approval be continuing,provided Avista
complies with both of the followingconditions:
1)Avista must maintain senior secured debt ratings that are investment grade,and
2)The all-in-coupon rate (includingfees)must not exceed 8.0%for securities issued
pursuant to this authority.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Avista's exhibits or other material accompanying this Application for any purpose
other than the issuance of this Order.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order shall be construed to obligate the State of Idaho to pay or guarantee
in any manner whatsoever any security authorized,issued,assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that the foregoing authorizationis without prejudiceto the
Commission's regulatory authority regarding rates,utility capital structure,service accounts,
valuation,estimates for determination of cost,or any other matter that may come before this
Commission pursuant to its jurisdictionand authority as provided by law.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
ORDER NO.34386 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of July 2019.
PAUL KJELLA ER,PRESIDENT
KRISTINE RAPER,COM ISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
I:\Legal\MULTI-UTILITY\AVU-U-19-02\orders\AVUUl902_mh.docx
ORDER NO.34386 5